Andersons may raise bet on alternate fuels

7/29/2006

With the launch of the first of three ethanol plants just weeks away, The Andersons Inc. has applied for permits in Ohio and Illinois for additional plants and has studied the possibility of producing biodiesel fuel.

"We think we're ready to go," Michael Anderson, chief executive of the Maumee agribusiness, said of an ethanol plant in Albion, Mich., which the company will operate and in which it has a 44 percent ownership stake.

He made the comments in a conference call with Wall Street analysts to discuss the firm's second-quarter financial results.

The firm made $10.3 million, or 66 cents a share, which was about even with the $10.4 million, or 67 cents a share, earned at the same time last year.

Those results were achieved despite staff and other expenses at the Albion plant, which has not begun to make income.

Also, farmers applied less of the firm's fertilizer to their fields this year because of concerns arising from soaring gasoline prices, officials said.

The Andersons' sales rose 4 percent to $378 million from $365 million in the second quarter of 2005, the company reported.

Mr. Anderson and finance chief Gary Smith expressed satisfaction with the results, and predicted that the Maumee-based firm will earn $1.90 to $2.10 a share, or 20 cents more than earlier expected.

The company's involvement in ethanol, which is a fuel additive distilled from feed corn, attracted the attention early this year of Wall Street players, who sent its stock to $122 a share. The stock has since settled down after splitting two-for-one last month. Shares closed down 78 cents, or 2 percent, to $37.78 in trading yesterday on the Nasdaq market.

Wall Street is excited about ethanol, especially about E85 -a formula that includes just 15 percent gasoline - because of the possibility that it could significantly cut the nation's dependence on foreign oil.

Michigan Gov. Jennifer Granholm will participate in a grand opening Aug. 5 at the Michigan plant, company officials said.

Besides previously announced plans for plants in Clymers, Ind. and Dunkirk, Ind., the firm has applied to government regulators for air permits for plants in Greenville, Ohio, northwest of Dayton, and in Illinois, near Champaign.

Mr. Anderson said the firm also has checked into making biodiesel but hasn't proceeded yet.

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.